BCG Matrix Relative Market Share Position Industry Sales

BCG Matrix Relative Market Share Position Industry Sales Growth Rate High 1. 0 Medium. 50 Low 0. 0 High +20 Stars II Question Marks I Cash Cows III Dogs IV Medium 0 Low -20 1

Strategy Analysis & Choice BCG Matrix • • Question Marks Stars Cash Cows Dogs 2

Strategy Analysis & Choice BCG Matrix • Question Marks Ø Low relative market share position yet compete in high-growth industry. Cash needs are high § Case generation is low § Ø Decision to strengthen (intensive strategies) or divest 3

Strategy Analysis & Choice BCG Matrix • Stars Ø High relative market share and high industry growth rate. § Best long-run opportunities for growth and profitability Ø Substantial investment to maintain or strengthen dominant position § Integration strategies, intensive strategies, joint ventures 4

Strategy Analysis & Choice BCG Matrix • Cash Cows Ø High relative market share position, but compete in low-growth industry Generate cash in excess of their needs § Milked for other purposes § Ø Maintain strong position as long as possible Product development, concentric diversification § If becomes weak—retrenchment or divestiture § 5

Strategy Analysis & Choice BCG Matrix • Dogs Ø Low relative market share position and compete in slow or no market growth § Weak internal and external position Ø Decision to liquidate, divest, retrenchment 6

Grand Strategy Matrix RAPID MARKET GROWTH Quadrant II Quadrant I • • • WEAK COMPETITIVE POSITION • • • Market development Market penetration Product development Horizontal integration Divestiture Liquidation • • Quadrant III Retrenchment Concentric diversification Horizontal diversification Conglomerate diversification Liquidation Market development Market penetration Product development Forward integration Backward integration Horizontal integration Concentric diversification Quadrant IV • • Concentric diversification Horizontal diversification Conglomerate diversification Joint ventures SLOW MARKET GROWTH STRONG COMPETITIVE POSITION 7

Strategy Analysis & Choice Grand Strategy Matrix • Quadrant I Ø Excellent strategic position Ø Concentration on current markets and products Ø Take risks aggressively when necessary 8

Strategy Analysis & Choice Grand Strategy Matrix • Quadrant II Ø Evaluate present approach seriously Ø How to change to improve competitiveness Ø Rapid market growth requires intensive strategy 9

Strategy Analysis & Choice Grand Strategy Matrix • Quadrant III Ø Compete in slow-growth industries Ø Weak competitive position Ø Drastic changes quickly Ø Cost and asset reduction indicated (retrenchment) 10

Strategy Analysis & Choice Grand Strategy Matrix • Quadrant IV Ø Strong competitive position Ø Slow-growth industry Ø Diversification indicated to more promising growth areas 11